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Property in Spain: the Spanish cities offering the best return on investment in 2021

Although the coronavirus crisis hasn’t caused property prices to plummet in Spain, they have dropped considerably in some popular cities, leaving some great investment opportunities for when the market recovers.

Property in Spain: the Spanish cities offering the best return on investment in 2021
Palma, the capital of the Balearic island of Mallorca, offers the best return for property investors in Spain.Photo: (Photo: Tom Pomodore/Unsplash)

It’s fair to say that so far the pandemic hasn’t caused the fall in property prices that house hunters in Spain had hoped for. 

There have however been price drops in coastal locations and other big cities such as Madrid and Barcelona which have been hit hard by the stagnation of Spain’s tourism industry, with resale home prices dropping 5 to 10 percent in many of these areas.

But overall prices are inching upwards again in 2021 – +1.6 percent in January- which means that the window of opportunity may be smaller than forecast, although the success of Spain’s summer tourism season could be crucial to determining this. 

Is it still worth investing in Spanish property?

According to the latest report by Spanish property consultancy firm Atlas Real Estate Analytics, the potential return on investment for those who do is big in some cities.

In March 2021, there were 121,273 properties available in Spain which were below market value. 

In order to find out which Spanish cities offer the best return on investment for to buy-to-sell or buy-to-let investors, the company factored in the properties’ features (state of upkeep, surface area, height, orientation, number of rooms, services offered, etc.), their location and the price at which they are being sold, to then compare it with other similar assets.

“Among the factors that have caused this drop in prices, there is firstly the economic effect of the pandemic and the decrease in direct sales, although, between similar or equal assets, the main difference in price is in the state and maintenance of the property,” explains Atlas Real Estate Analytics.

“The data obtained in this analysis is a great incentive for all types of investors, whether individual buyers or large holders, who seek opportunities in the current context,” says Alejandro Bermúdez, their company CEO.

The following ranking includes their findings for 17 Spanish cities, ordered from highest to lowest in terms of average profit/value increase that can be made in each, as well the number of properties in sale in each city which are below market value and offer these investment opportunities.

Palma de Mallorca: €53,035 profit – 4,392 properties 

(Photo: Thomas H/Pixabay)

Barcelona: €51,675 profit- 21,671 properties 

(Photo: Kaspars Upmanis/Unsplash)

Madrid: €40,881 profit- 23,906 properties 

(Photo: Alex Vasey/Unsplash)

Vigo: €35,731 profit – 4,708 properties 

(Photo: Sergei Gussev/Flickr)

Bilbao: €34,960 profit – 3,143 properties 

(Photo:  Eduardo Kenji Amorim/Unsplash)

Santander: €27,774 profit – 3,043 properties 

(Photo: PublicDomainPictures/Pixabay)

Valencia: €26,211 profit – 13,711 properties 

(Photo: travelnow.or.crylater/Unsplash)

Málaga: €23,688 –  8,368 properties 

(Photo: David Becker/Unsplash)

Valladolid: €21,409 profit – 4,923 properties 

Sevilla: €21,284 profit –  6,312 properties 

(Photo: Joan Oger/Unsplash)

The rest of the list is completed by cities in Spain where the average return on investment when selling a property is likely to be below €20,000:

Oviedo: €19,868 profit –  6,971 properties 

Las Palmas de Gran Canaria: €19,410 profit – 3,073 properties 

Alicante: €19,350 profit – 12,537 properties 

Badajoz: €18,488 profit –  4,515 properties 

Logroño: €16,825 profit –  2,779 properties 

Santa Cruz de Tenerife: €16,657 profit – 2,522 properties 

Zaragoza: €15,678 profit  –  5,930 properties

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REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you're considering making the move and buying property in Spain, but don't fancy purchasing in a rural village in the middle of nowhere, you should know where the cheapest, most in-demand parts of the country are.

REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you’re thinking about relocating, Spain is a fantastic place to do it. Foreigners have been moving to Spain for decades, not only for its fantastic food and weather, along with a laid-back lifestyle, but housing is generally affordable – if you know where to look.

Though the rise in the Euribor has sent interest rates spiking, house prices in Spain are expected to flatten somewhat in 2023 and it could be a good year to find a bargain, depending on your financial situation.

Knowing what type of house you want and where in Spain you want to live is one thing, but knowing the cheapest, yet most in-demand parts of the country could really help you narrow down your search.

Fortunately, Spain’s leading property website Idealista has put together a list of the most ‘in demand’ municipalities of Spain and where you can find the most expensive and, more importantly for the house hunters among us, the cheapest municipalities of Spain to buy property.

It’s based on data from the last quarter of 2022 and is the average price of housing in towns with more than 1,300 sale announcements and costs valued at more than €1,100 per square metre. 

You can find the ten cheapest areas of Spain to buy property by average price below, but it’s worth noting that Idealista did these rankings by average price across the entire municipality, so there are likely individual towns and villages dotted around Spain where prices are significantly lower.

That said, this list gives you a good idea of the areas to look out for.

READ ALSO:  What will happen with property prices in Spain in 2023?

The 10 cheapest municipalities in Spain to buy property 

Santa Pola (Alicante) – Santa Pola, in the Alicante province, is the cheapest most in-demand municipality to buy a house, according to Idealista’s rankings. The average price for a house in Santa Pola costs just €151,796, though this may come as a surprise given its prime location in a foreign hotspot on the sought-after Costa Blanca. The main town of Santa Pola itself is a small beachfront community with a population of around 35,000. It also has a large foreign population and is a short drive or bus away from both Alicante and Elche.

Ourense (Galicia) – Next on the list is Ourense in Galicia where the average price is €154,941. The municipality is home to several towns and villages, surrounding the main medium-sized town of Ourense itself in southern Galicia. The town has a population of around 105,000 and is a little over an hour’s drive from both Santiago de Compostela and the coastal city of Pontevedra.

Oviedo (Asturias) – Third on the list is the municipality of Oviedo where you’ll pay an average of €154,968 for a property. Another area in northern Spain, the main city Oviedo itself, which is the capital of Asturias and has a population of 220,000. It sits between Cantabrian mountains and the Bay of Biscay. It’s known for its picturesque medieval old town and impressive architecture. 

Jerez de la Frontera (Cádiz) – Properties cost an average of €155,563 in the municipality of Jerez de la Frontera, or Jerez as it’s commonly referred to. It’s located in the Cádiz province of Andalusia and is a real piece of ‘traditional’ Spain. Jerez city is a decent-sized place with a little over 200,000 people and is known for horses, flamenco dancing and sherry, as well as the Alcázar de Jerez, an 11th-century fortress that harks back to Andalusia’s Moorish past.

READ ALSO: Is it better to buy or rent in Spain right now?

Torrevieja (Alicante) – Another municipality in Alicante and another incredibly popular with foreign homeowners. Properties here go for an average of €155,787. Torrevieja itself has a population of 82,000 and is another coastal town, but also has nature trails and salt plains nearby.

Murcia (Murcia) – Murcia is often overlooked, wedged between Alicante and Andalusia, but you could grab a bargain here with average prices of €157,119. Murcia capital is a bustling city of almost 450,000 people, and is strategically placed for trips to the Costa Blanca, Costa Calida, Costa del Sol, and Costa de Almeria.

Parla (Madrid) – The municipality of Parla lies just 20km south of Madrid and the town of the same name is home to 130,000 residents. It’s a great commuter area for those who work in Getafe or the capital. A house here costs an average of €160,652. 

Salamanca (Castilla y León) – The municipality of Salamanca surrounds the capital of Salamanca in Castilla y León in northwestern Spain. Buying a property in this area costs an average of €162,909. The main city of Salamanca is known for its university, which is the oldest in Spain and dates back to 1218. Understandably, much of Salamanca’s roughly 150,000 residents are students, which gives the town a lively atmosphere.

Burgos (Castilla y León) – Another northwestern Castilla y León municipality, is Burgos has around, where you can buy a house for just €163,164. The city of Burgos has around 180,000 inhabitants and is known for its medieval architecture and grand cathedral. 

Dos Hermanas (Sevilla) – The second most populous municipality in the province of Seville, properties cost an average of €163.274 here. The Andalusian town is just 15km south of Seville, making it great for commuters or those who want plenty of culture nearby. 

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